Shares of Meta climbed 6% on Wednesday, marking a notable rebound for the social media conglomerate. The stock rally follows the company's introduction of its new AI assistant, Muse, with analysts widely praising the potential of this standalone chatbot.

In a client note, analysts at Mizuho Securities expressed strong conviction, stating they believe Meta's consumer-facing AI agent, Muse, marks the beginning of a major product innovation cycle that has yet to be fully reflected in the current share price. The firm has assigned an "Outperform" rating to Meta with a price target of $750. Similarly, KeyBanc Capital Markets reiterated an "Overweight" rating, boosting its price target to $780. KeyBanc analysts wrote that they continue to believe the market undervalues Meta's leading position in the AI space and the benefits of its upcoming product rollout.

Meta unveiled Muse on Tuesday, describing it as a tool designed around people's existing communication habits. Whether used within the standalone app or directly through WhatsApp, conversing with Muse feels as natural as texting a real person, the company explained. During a video presentation, CEO Mark Zuckerberg highlighted the assistant's robust privacy and security features. "We have built a dedicated, secure credential vault to store your passwords and credit card information, which Muse cannot access," Zuckerberg stated. He elaborated that for sensitive operations such as making payments or sending messages, Muse will always request the user's explicit confirmation before proceeding. Zuckerberg added that they have leveraged WhatsApp's encryption architecture, ensuring that even Meta itself cannot view the messages users send through the assistant.

Following this announcement, Meta has recovered a significant portion of the losses it suffered earlier this year. Despite the recent surge, the stock is still down approximately 1% year-to-date.